DTN Midday Livestock Comments 07/28 12:03
Live Cattle Seek Higher Levels
The cash cattle market is anxiously waiting to trade higher, but so far
there's been very little interest seen.
DTN Livestock Analyst
Live cattle futures are realizing with consumer demand as robust as it is
and with boxes jumping higher throughout the week, the futures might as well
trade higher too! This comes with perfect timing for the cash cattle trade as
feedlots aspire to see higher prices this week but will need the market's full
support to do so. December corn is up 3 1/2 cents per bushel and December
soybean meal is down $4.20. The Dow Jones Industrial Average is down 54.78
points and NASDAQ is up 104.65 points.
Live cattle contracts are just itching for another good rally to develop in
Wednesday's market. With boxed beef prices continuing to seek a brisk pace to
higher prices, the cash cattle market stands an excellent chance at demanding
higher prices this week. Thus far, there's not been much trade throughout the
countryside other than a few head in Nebraska which sold for $123.00; but
before the day is over more trade should develop. Asking prices remain around
$122-plus in the South and $200-plus in the North. August live cattle are up
$0.27 at $123.20, October live cattle are up $0.40 at $128.80 and December live
cattle are up $0.25 at $133.72.
The Fed Cattle Exchange Auction listed a total of 7,773 head; of that, 1,085
sold; 181 were scratched from the auction; and 6,507 head were listed as
unsold, as they did not meet reserve prices which ranged from $119 to $123.
Opening prices ranged from $115 to $118, high bids ranged from $116 to $120.
The state-by-state breakdown looks like this: Texas 7,463 total head, with
1,085 head sold at $119 to $120, 6,197 head unsold and 181 scratched from the
auction; Kansas 310 total head, all of which went unsold.
Boxed beef prices are higher: choice up $2.72 ($272.45) and select up $1.57
($255.51) with a movement of 93 loads (49.06 loads of choice, 18.61 loads
select, 11.97 loads of trim and 13.10 loads of ground beef).
The feeder cattle and corn markets have quarreled Wednesday morning as both
aspire to trade higher. Breaking into Wednesday's trade, the corn market held
the advantage as the feeder cattle contracts were leery upon corn's advancement
and upon not having seen any developments being made in the cash cattle market.
Thankfully Wednesday's midday report showed boxed beef prices were higher once
again and cattle are starting to sell in Nebraska for $123. Both these factors
gave feeders the confidence they needed to move the market higher and begin to
creep toward the resistance at $162.00. August feeders are up $0.10 at $160.80,
September feeders are up $0.07 at $164.07 and October feeders are up $0.05 at
Lean hog futures may have petered out but there's still traction being made
in the market fundamentals. It's impressive to see packers have already bought
upward of 6,000 hogs; with supplies being short they wouldn't be aggressively
chasing the cash hog market if they thought the pork cutout value was going to
wane lower. August lean hogs are down $0.57 at $106.90, October lean hogs are
down $1.77 at $90.75 and December lean hogs are down $1.37 at $83.47.
The projected CME Lean Hog Index for 7/26/2021 is down $0.17 at $112.05 and
the actual index for 7/23/2021 is up $0.01 at $112.22. Hog prices are unchanged
from Tuesday on the National Direct Morning Hog Report, thus far there's been
6,386 head bought with a weighted average of $103.93, ranging anywhere from
$101.00 to $108.00 and a five-day rolling average of $103.96. Pork cutouts
total 167.32 loads with 153.17 loads of pork cuts and 14.16 loads of trim. Pork
cutout values: up $1.69, $125.18.
ShayLe Stewart can be reached at email@example.com
(c) Copyright 2021 DTN, LLC. All rights reserved.
DTN offers additional daily information available free through DTN Snapshot – sign up